Dear CNN: Patents Are Not A Proxy For Innovation

from the get-real dept

We've seen it over and over again in the press. They love to assume that the number of patents being filed is a proxy for innovation. There's just one (large) problem with that. Multiple studies have shown no connection between patents and innovation. But, don't tell that to the reporters at CNN who are fretting about how the "recession" has taken its latest victim: US Innovation. This is ridiculous on so many levels that even patent system defenders are disagreeing with CNN. First, CNN bases this on a minuscule 2.3% decline in patent filings, despite a massive growth in patent filings over the past fifteen years.

But, more importantly, there is no indication whatsoever that this means anything in terms of US innovation. No one at CNN seemed to think it was even worth trying to actually back up that claim with any evidence whatsoever. If innovation were really declining in the US, you would think there would be some sort of tangible evidence of it, but CNN and reporter David Goldman never bother to even look for it. Tragically, USPTO boss David Kappos -- who should know better -- perpetuates the myth that the two are directly connected. In commenting on the decline in patent applications, he notes:

"That's unfortunate because [patent filings] are a reflection of innovation," said David Kappos, director of the Patent Office. "Innovation creates so many jobs and so much opportunity for our country. It is absolutely key to our long-term success in the global economy."

But, of course, there is no indication that this tiny drop in applications is reflective of anything at all when it comes to innovation. It could be a whole variety of factors, from firms recognizing what a waste it is to patent certain things, to companies deciding not to waste money on patents during a recession, to the various court rulings that have finally put a tiny pushback on what is considered "patentable." But none of that suggests any limit on US innovation or ingenuity. And, it's even more ridiculous to claim, as Kappos appears to do in that quote, that this drop in patent applications could represent a decrease in jobs and opportunity. That statement is even more laughable, since Kappos must know that the number of jobs created is not even remotely related to the number of patents granted or held (just ask some patent hoarding firms that hold many patents but employ just one or two people). What a shame that Kappos would repeat such myths. As boss of the PTO, perhaps he feels it's his mission to overstate the importance of the organization, but his claims should have at least some basis in reality.

But, of course, a good explanation for why this is happening is explained (though, not by the CNN reporter who appears to miss it entirely) later in the article: the USPTO is entirely funded by patent application fees. Thus, it has every incentive to get more people to file, and to play up the prestige and value of a patent, even when the evidence is to the contrary. So, now it appears that CNN becomes the PR arm of the Patent Office, rather than actually looking to find out what's going on.

Mike, I think you are jumping again on this one, getting really narrowly caught up in words and ignoring the actual message.

That's unfortunate because [patent filings] are a reflection of innovation

Patent applications are a reflection of innovation, or at least a leading indicator. Is it a perfect measurement? Nope. It's just an indication, a reflection of what is going on.

You may go to argue that changing the paint color on something or adding a winky light on an existing product is innovation, but most of us look at innovation as doing something new, not the process of narrowly refining existing product lines. As such, a decline in the number of patents is a pretty good indication in a decline in new innovative ideas that merit a patent.

Oh yeah, and if you take away the Apple security tape, that number gets worse.

Re: Re: (I always feed ferrets to my Ugly Anaconda)

Yes, I'm sure Microsoft, IBM, Google, and individual inventors have thrown up their hands and are refusing to apply for patents in order to protest the system. I expect to hear announcements at shareholders meetings: "well, we've got some great technology coming up next year, but we've decided not to patent it and just take our chances in the hopes that nobody else does, either."

Re:

Your post makes no sense. Did you read the post? Are patent trolls generally more innovative because they have lots of patents even if they don't sell a single product? Shit, I could apply for hundreds of patents right now on different jerking off techniques that you probably already use every night and learned from your boyfriend - doesn't mean I invented them or that U.S. innovation is suffering if I don't file them.

The point is, there is no correlation. Fewer patent applications this year just means that fewer people applied for patents this year.

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I guess you'll also argue that the lower volume of applications has no correlation to the lower R&D budgets at most large companies? And because R&D budgets have no bearing on number of patent applications, clearly R&D is just less efficient now?

You're pretty good at the gay-baiting vulgarity, not so great with the reasoning.

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Brooks, one of the things I have learned here is that some people aren't willing to accept the easy and straight forward explaination for anything. They are always looking for some conspiracy, their tin foil beanies spinning out of control.

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No, sorry, you are reading this one wrong, and I think intentionally just to troll.

Hell, by your own logic, there's been zero innovation until patent systems appeared.

Quite simply, no. The patent system is just an INDICATION, not a cause. The patent system in and of itself doesn't create anything (except occasional fodder for Mike to chew on). The patent system is just a system, and measuring the number of patent applications is just an indicator of activity to develop new things, innovative enough to potentially merit a patent.

You are confusing cause and effect. Remember, the wall doesn't hit your head, it's your head hitting the wall.

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And you are attributing one type of measurement to another without backing.

The fact that there are more/less patent applications does not mean there is more/less activity of any other kind.

If your hypothesis held any water whatsoever, then we should be seeing drops in particular types of patent applications in accordance with drops in related sectors. Some sectors have been massively gutted in this economic downturn while some other have actually survived untouched, and yet others are thriving.

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I think what he's trying to get at here, is that it's true R&D leads to more patents. Thats not necessarily in correlation to actual invention. I know first hand that R&D investment is expected to yield patents. Sometimes thats the sole purpose of the research in the first place. Given that the system is increasingly considered to be broken, The future of many patents already granted are in question and the USPTO is backlogged for at least 5 years, many companies are foregoing the investment in process oriented patents. I suspect that the realization that many of the "process/easy patents" are basically worthless.. that only leaves real inventions. A real invention is a lot harder than a "one click checkout" patent. It also takes time to refine, graph, spec and document before submission. So I personally don't know that fewer patent applications means less innovation, it may be a correction in the given potential invalidity of idea patents.

American Innovation?

So if the Fortune 10 company I work for files for a US patent for R&D work done in Germany and India, it is demonstrating American innovation?

We make about half of our revenues outside the US; we spend about half of our R&D budget outside the US; most of our patents are filed worldwide... It might be easier for CNN to tell the "USA vs the world" story, but in each of our businesses, the truth is it is "us vs the other 3-4 companies who are really good at this also."

And patents as an innovation indicator? Patents are for innovations you're willing to disclose. A lot of the real innovation is protected as a trade secret - business processes, manufacturing methods, even financing models.

2009 was a down economic year. In bad economic years, companies spend less money. Less money means less R&D and fewer patent filings. I think it's fair to say that the recession has led to a decrease in innovation AND patent filings. Both are "indicators" of a bad economy, but it is probably not fair to say that one is an indicator of the other. That is all.

Patents and innovation

Excellent, Michael! I have been saying this for years (in fact, it is the reason I left my former patent firms and struck out on my own!).

Due to the lack of campaign finance reform (welfare for the wealthy results) and the USPTO being "self-supporting" we have developed a system that inhibits innovation, and is increasingly doing so - we are spiraling toward our own demise in technology!

As originally intended by the founding fathers, IP laws are good; as implemented by people the wealthy own, they are horrible!

Small Business and Patents

Whatever happened to the American Dream....I am a person that believes in having a chance to make it in America...I own 2 patents and have worked my butt off to make my dream come true butt sometimes it seem like i am just a spring board for companies to try to work around what i have and come out with something else or create a standand on what I am doing. Is the patent system only for the wealthy people and a way of controlling the world or what? I know i have a good idea but something needs to be done if this is suppose to be America....Let me hear some feed back.

Innovation Is Alive and Well

Though some complain because the drop in filings has cut into their profits, perhaps it's a positive turn of events, in some ways. Maybe fewer junk patents will tie up the filing system. And, quite likely, recently we've been experiencing in patent law a "bubble" that finally burst. In any case, I agree that innovation and patent filings, though related, are not synonymous. So, in short, I suspect that the rumors of the death of innovation have been greatly exaggerated.